ADMINISTRATIVE PROCEDURE

Financial Recording of Deposits for Use of University Property

Procedure Overview

University departments collect deposits from students, staff, and others when University property is provided for temporary use. These are cash amounts collected when keys, computers, musical instruments, facilities, lockers, and other equipment or property is assigned for use by an individual or group. The full amount of the deposit is returned to the individual or group if the property is returned to the department on time and without damage, but the deposit will be retained by the department if the terms of the agreement are not met (e.g., items not returned on time, damage or non-return of equipment, damage to physical spaces, etc.).

  1. Managing Deposit Activity

    The University's financial system does not track detailed information necessary to effectively manage deposits including, but not limited to:

    • Name of depositor
    • Contact information
    • Start date
    • Expected end date (or date of deposit forfeiture)
    • Amount of individual deposit
    • Deposit agreement/signature

    University departments are responsible for maintaining their own systems for the documentation and tracking of deposits necessary for effective management and policy compliance.

  2. Collecting and Holding Deposits

    When a deposit is received, the department follows cash handling procedures outlined in the Administrative Policy: Accepting and Depositing University Revenue. The following ChartField values are recommended for appropriately recording the credit entry for equipment/damage deposits (the debit to cash is automatic when the deposit is recorded):

    Fund Code – 1026 Other Unrestricted
    The Fund code should reflect the type of funds that would be revenue to the University if the deposit is forfeited. In most equipment/damage deposit situations, this will be Fund 1026.
    DeptID – As determined by the department
    The DeptID should identify the unit that will retain the deposit if it is forfeited.
    Program – None
    A Program value is not allowed in the same string as the Account value used to record deposits.
    Account – 200141 Deposits – Keys, Locker, etc.
    The deposit is a liability to the University in that if the terms of the agreement are met the funds will be returned to the depositor. Account 200141 is defined as a "holding Account for funds held on behalf of others – e.g., deposits paid by students for keys, lockers, miscellaneous equipment."
    Optional ChartFields – As determined by the department
  3. Refunding Deposits

    If the equipment or property is returned to the department per the terms of the deposit agreement, the deposit is returned to the depositor with no affect on University revenues or expenses. The same ChartField string that was credited when the University received the deposit should be used to record the debit entry for refunding the deposit, including the liability Account (200141 Deposits – Keys, Locker, etc.).

  4. Converting Deposits to Revenue

    If the equipment or property is not returned to the department per the terms of the deposit agreement, the deposit or a portion thereof is forfeited. The department creates a journal to convert the forfeited deposit from a liability to revenue. The Fund, DeptID, and optional ChartField values should be the same on both the credit and debit sides of the Journal. A Program value to identify the type of activity that occurs in the department and that will be supported by the forfeited deposit should be included in the credit/revenue side of the journal. The primary driver in selecting a Program value is Function code. Refer to the Chart of Accounts Manual for a selection of Program values. The transaction should:

    • Credit Revenue – example: 520207 Fines and Fees – Academic Units

      Account 520207 is the appropriate revenue code to record the forfeit of most deposits made by students for keys, lockers, and other equipment. The department should select the appropriate revenue Account for their type of unit and the type of activity that generated the income.

    • Debit Liability – 200141 Deposits – Keys, Locker, etc.

      The liability is removed for this particular deposit.

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